Correlation Between Alfa Financial and Apple
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Apple at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alfa Financial and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Apple Inc, you can compare the effects of market volatilities on Alfa Financial and Apple and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alfa Financial with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Apple.
Diversification Opportunities for Alfa Financial and Apple
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alfa and Apple is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Alfa Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alfa Financial Software are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Alfa Financial i.e., Alfa Financial and Apple go up and down completely randomly.
Pair Corralation between Alfa Financial and Apple
Assuming the 90 days trading horizon Alfa Financial is expected to generate 1.31 times less return on investment than Apple. In addition to that, Alfa Financial is 1.74 times more volatile than Apple Inc. It trades about 0.03 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.06 per unit of volatility. If you would invest 21,599 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 341.00 from holding Apple Inc or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Apple Inc
Performance |
| Timeline |
| Alfa Financial Software |
| Apple Inc |
Alfa Financial and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Apple
The main advantage of trading using opposite Alfa Financial and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Apple can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Apple will offset losses from the drop in Apple's long position.| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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